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Report: Corruption Aggravates Poverty


A world map with Transparency International's 2010 corruption perceptions index, 26 Oct 2010
A world map with Transparency International's 2010 corruption perceptions index, 26 Oct 2010

Anti-corruption group Transparency International said in a report that corruption aggravates poverty and slows economic development. Tuesday's report is based on surveys of perceived corruption in nations around the world.

The authors say systemic corruption can add 20 percent to 25 percent to the cost of government procurement, resulting in unnecessary purchases, and inferior quality goods and services. The report also notes that corruption distorts fair competition for government contracts, wastes scarce resources, and neglects basic needs.

In extreme cases, it can lead to "destruction of development opportunities," which perpetuates poverty.

Up to 70 percent of government expenditures are typically awarded in contracts, so corruption can have a major impact on public services and infrastructure. Transparency International said nations with weak governance and large flows of aid are particularly vulnerable to corruption.

The report also said corruption can hit private companies with major "financial and reputational consequences."

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